News

This week, on December 13th, General Counsel, P.C. celebrated our 12th Anniversary. This would not be possible without the trust, support and loyalty of our clients and friends. Thank you.

Personally, as I trust most of you have also experienced over the past 12 years, there have been countless challenges, many victories, and occasional losses. I hope that these experiences have helped me grow as a business owner and legal advisor.

I often tell clients (and other GCPC attorneys) that as attorneys, our responsibility is to serve our clients. We must understand and proactively protect our clients’ interests. We must actively communicate. We must consistently strive to do our best to serve and satisfy our clients to the best of our abilities. I sincerely hope that we always accomplish this goal for our clients.

When I started General Counsel, P.C. 12 years ago, I was fortunate to have 5 clients leave my prior firm with me. They were taking a chance since they were leaving a large national law firm to continue working with a start-up solo practitioner. My gratitude to these 5 original GCPC clients cannot be understated. They were the foundation of the firm. And, I am proud to state that each of these 5 clients remain General Counsel, P.C. clients.

It is this long term client relationship built on trust, support and service that I hope we can build with all General Counsel, P.C. clients. Yes, there are sometimes challenges, but I hope that our dedication to service and absolute client satisfaction will continue to build the foundation of client relationships. If we ever do not satisfy such expectation, please never hesitate to contact me immediately.

Finally, if you have not had the opportunity to review our revamped website recently, here is a link: www.gcpc.com. We continue to serve our clients with 4 primary practice areas: (1) employment; (2) corporate; (3) litigation; and (4) government contracts.

In closing, thank you again. General Counsel, P.C. would not be able to celebrate 12 years without the support and loyalty of our clients and friends. I wish each of your success in your business and personal pursuits. And, if we can ever be of service, please contact us.

Wells Fargo was caught falsifying accounts to meet sales goals for cross-selling products to customers and paid a $185 million fine.

I will not be surprised if we find that this is not the only issue inside of the bank that comes to light. At the core of this type of behavior is a cultural corruption and mis-alignment among the company, employees and incentives.

The Peg Bundy Business Model

Years ago on an episode of “Married with Children” the character Peg Bundy got involved in a home based business selling make-up to her neighbors. Peg made an off handed comment to her friend that ‘while the make-up isn’t very good… every time I order more they send me a check…’ Later in the episode Al Bundy gets the bill for all the orders and explains to Peg that her behavior is how they are ‘rocketing to the poorhouse…’

Peg was not incentivized to sell the make-up, instead she was incentivized to order more make-up because that is how she earned money in the venture.

Likewise, the incentive structure at Wells Fargo was not to service customers, rather it drove improper cross-selling and has cost Wells Fargo a great deal in actual and reputational capital.

Wells Fargo CEO John Stumpf contends that “There was no incentive to do bad things,” in connection with the scandal, the results suggest otherwise.

How About Your Business?

I once participated in a meeting with a Sales Director who was asked – ‘How do your sales managers earn bonuses and commissions? How do they earn their commissions and bonuses?’ His answer: “I have no idea.” Would you be surprised to learn that the company had stagnated growth for five years and over 100% turnover on its sales team? This sales leader had no idea what incentives motived employee behavior. I wondered: How could he lead? He was removed him from the position on the spot – the company grew 15% in the following year as a result of a revitalized marketing and sales team.

Alignment

As you can see in the WSJ Article, Mr. Strumpf “feels accountable” for what happened. Well, leadership is always, completely accountable for what happens inside an organization because leadership sets the strategy, culture and compensation plans that drive the behavior that determines results.

Compliance and Accountability – Keys to Building Company Value

While the bank explains that the number of people involved is small 5,300 (with few, if any in senior management getting the ax) – it is telling that it was so wide spread and lasted for several years. The compliance department failed to check the accounts – even in the face of customer complaints and the only people held to account are line employees.

Well, in middle market businesses there are no such protective barriers for Owners and Leaders. Make sure your company has a culture focused on effective execution, focused on doing the right things well. Walk the halls of your business, find out what is happening at the loading docks and at the point of delivery of your services. Leadership must hold itself accountable to set the example and hold others accountable before massive failures, fines or worse…

Decide what you want your company’s future to be and call Rich Trimber at General Counsel, P.C. for a consultation and fitness checkup on your company’s operations, stress points, structure, HR Policies and Procedures (strategic HR with training plans) and team needs so you can grow a great business – a living company that can survive and thrive in the future.

Dear General Counsel, P.C. Clients and Friends:

General Counsel, P.C. is honored to congratulate J. Andrew Baxter (“Andy”), who leads the firm’s litigation practice, on his selection as a 2016 Virginia Super Lawyer Rising Star within the Business Litigation category.

Andy is a trial attorney experienced in a wide range of litigation areas. He provides counseling and risk management services that allow clients to avoid costly business disputes. But, when necessary, he has the litigation and trial experience to fiercely advocate for clients.

If you or your business is faced with a potential dispute, Andy (and the GCPC litigation team) will be your advocate and defender. Do not hesitate to contact him with any questions or if we can ever be of assistance.Experience:

J. Andrew Baxter has spent his entire career as an attorney servicing clients in Northern Virginia and the District of Columbia. Mr. Baxter is a trial attorney experienced in a wide range of litigation areas, including Personal Injury, Business, Debt Collection and Intellectual Property. His current practice is focused on taking advantage of his extensive trial court experience to offer business and individual clients the benefits of a full-service law firm, with the individual attention offered by a small firm.

J. Andrew Baxter’s experience is in complex corporate and insurance litigation. Mr. Baxter has represented local and international companies in their creation, contract matters, trademarks, and lawsuits. Mr. Baxter has obtained sizable settlements and judgments for his clients, and has protected his clients’ assets from lawsuits. More importantly, Mr. Baxter has successfully provided counseling and risk management services that have allowed his clients to avoid costly business disputes and litigation.

J. Andrew Baxter is a graduate of Florida Coastal School of Law, where he earned his Juris Doctor and a Certificate in International and Comparative Law. Mr. Baxter also attended the Haifa Law Institute in Haifa, Israel, where he studied International Corporate Law, Comparative Law, and International Humanitarian Law. Andrew Baxter received his Bachelor’s degree in Music Composition and Performance from Valdosta State University.

Dear General Counsel, P.C. Clients and Friends:

General Counsel, P.C. is pleased to welcome Sharon O. Steele to lead the Firm’s GovCon Practice Group.

Ms. Steele has a proven track record of effectively providing a broad spectrum of business-oriented, strategic legal advice to government contracting organizations. She has advised government contracting clients on procurement matters, compliance, technology licensing, export/import and international law, internal investigations. She has successfully counseled clients involved with multi-million dollar government construction claims and REAs. Ms. Steele has counseled clients with U.S. government contracts in the Middle East, Europe and Africa on matters involving False Claims Act, Foreign Corrupt Practices Act, FAR/DFAR compliance as well as internal DCAA/DCMA and procurement audit preparations and executions.
Ms. Steele has over 15 years of experience as a government contracts attorney. She previously held senior counsel and executive positions with leading government contractors such as Kellogg Brown & Root, SAIC and Time Warner Cable.

Ms. Steele has served as a Commissioner with the Loudoun County Economic Development Committee as well as a Board Member of the Loudoun County Housing Advisory Board.

Ms. Steele earned her J.D. from Pennsylvania State University – Dickinson School of Law and earned her B.S., from James Madison University.

A small business attorney will tell you that Most small businesses now are being organized as limited liability companies (“LLCs”) because of the limited liability afforded owners of the company and the favorable pass thru income tax treatment of the company’s earnings. In addition, management of the company can either be retained by the owners—that is, the members–of the company, or centralized in one or more managers, who may, but need not, be owners. It is this flexibility in management structure that sets LLCs apart from other forms of business entities.

Ask A Small Business Attorney: Member or Manager Managed LLC?
LLCs managed by its members (so-called Member Managed LLCs) are appropriate where all of the members wish to be actively involved in the management and business operations of the company. On the other hand, if some or most of the members are merely passive investors, do not wish to participate in the management or business of the company, or lack the business skills necessary to manage the business, management of the LLC is usually delegated to those qualified members who want to be involved in the company’s business, or to a skilled outside third party non-member—this is known as a Manager Managed LLC. Managers are usually elected by the members of the LLC.

The Company’s operating agreement, which need not be filed with the state, is an agreement among the members (and non-member manager, if applicable) as to the management, finances, and operation of the LLC and its business. The operating agreement will generally set forth the member votes necessary to act and manage the company in a Member Managed LLC, and the limitations, if any, on the authority of a manager in a Manager Managed LLC to manage the affairs and business of the LLC. In a Manager Managed LLC, for example, oftentimes the operating agreement will prohibit the manager or managers from acting on certain fundamental matters—often referred to as major decisions– without first securing the prior approval of the members, while in some cases the manager will be given the absolute authority to manage the LLC without any participation by the members. Likewise, if a Member Managed LLC’s operating agreement only requires a majority vote of members, a member with more than 50% of the membership interests will usually have the right to control the actions of the LLC.

In a Member Managed LLC each of the members is generally deemed to be an agent of the LLC and, as such, legally authorized to act on behalf of and bind the LLC to contracts or other business obligations with third parties without the approval of the other members. Whereas in a Manger Managed LLC, only the manager—and not members who are not named as managers– can act on behalf of the LLC. So, if you intend to have passive investors or members with limited business skills in your LLC and are concerned that an inexperienced investor or member might make imprudent or unauthorized business decisions that could be injurious to your LLC, you would probably want to have a Manager Managed LLC. If, on the other hand, you and your co-owners all want to be involved in the management and day to day business of your LLC and are each capable of doing so, you would most likely want to be a Member Managed LLC.

Whether an LLC is recognized as Member or Manager managed and whether its members can legally bind the LLC depends on the laws of the state in which the LLC was organized. In a vast majority of states, an LLC is deemed by default to be Member Managed by all of its members, as in a general partnership, thus usually giving each member the legal ability to act on behalf of and bind the LLC. However, depending on the laws of its state of organization, an LLC can opt out of the default rule by designating in the articles of organization it files with the state or in its operating agreement that it is to be Manager Managed, thereby preventing any member, other than the manager, from participating in management or legally binding the company. Virginia and Maryland, for example, require that such designation be included in the LLC’s articles of organization filed with the state, while the District of Columbia and Delaware permit that designation to be made in the LLC’s operating agreement.

Professional Guidance from a Small Business Attorney
How an LLC is to be managed can be one of the most important decisions in the organization and structuring of an LLC and should not be made without the advice of legal counsel. Contact a small business attorney at General Counsel PC are well versed and experienced in determining the appropriate management structure for an LLC and would be glad to assist you in making such a decision for your LLC, as well as helping you organize an LLC and drafting its operating agreement. For more information, feel free to call or e-mail Norman Eule at neule@gcpc.com or 703-556-0411.

Marci Love Thomas, General Counsel
The end of the fiscal year means companies will try some things they don’t normally try to book some business before Sept. 30. Bidding in a reverse auction is one possibility to do that. Marci Love Thomas, senior counsel for the Government Contracts Practice at the General Counsel law firm joined In Depth with Francis Rose for Industry Chatter. She said some companies learned the hard way the rules are the rules and late is late when it comes to reverse auctions.

August 27th Federal News Radio — Marci Love Thomas, Business Law Attorney: Too many choices for veteran owned small businesses — Veteran owned small businesses might have too many options to help them earn federal contracting opportunities. And the differences between the Service Disabled Veteran-Owned Small Business Concern and Vets First program are confusing. Marci Love Thomas is senior counsel at the General Counsel’s government contracts practice and former senior attorney adviser at the Small Business Administration. As a business law attorney, She tells In Depth with Francis Rose about the differences between the two programs.

If you or your business are being sued or filing a lawsuit, there is one question you must ask your attorney first, and often: “What is the value of my case?”

The greatest advantage you can have in litigation, by far, is superior knowledge of the value of the case at each of these stages. Insurance companies have known this for some time.

Insurance companies employ advanced computing technology that tracks numerous data points for the entire country, all for the specific purpose of determining the ceiling to settle an individual lawsuit–the Case Value.

The information that insurance companies track includes local property values, medical reports, local demographics, local economic information, news reports, local jury awards, and claimant attorney’s past performance. “COLOSSUS” was the first widely-used software product in this vein, and the “WATSON” artificial intelligence supercomputer–which performed so admirably on TV’s “Jeopardy”–is the prototype for the next generation of case evaluation systems. Over the last 20 years, the insurance industry has learned to spare no expense when it comes to case valuation; and every business involved in litigation should take this lesson to heart.

Case Valuation changes, sometimes dramatically, throughout the stages of a lawsuit. The value of the case should be addressed at each of the seven stages of litigation:

Initial Phase: At the filing of pleadings, prior to the service of discovery

Early Discovery Phase: At the filing of written responses to discovery, prior to witness depositions

Late Discovery Phase: During the witness depositions, prior to the close of discovery

Summary Judgment Phase: At the close of discovery, prior to a hearing on summary judgment

Trial Phase: At the filing of trial motions, prior to the close of the trial

Post Trial/Appeal Phase: At judgment in the trial, prior to filing appellate briefs

Business owners often relate to me their frustrations over past lawsuits they were involved in; and it is usually not that the end result of the litigation that was unsatisfactory, but, rather, that the result did not justify the resources expended on the litigation. This is entirely an issue of Case Valuation.

Owners are necessarily passionate about their businesses. Maintaining peace of mind during the litigation process is mostly dependent on being adequately informed or the risks and benefits of each course of action–in objective, substantiated, and monetary terms–at every stage of the lawsuit.

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About General Counsel, P.C. – Every Business Needs a General Counsel — Founded in 2004 by Merritt Green, General Counsel, P.C. represents businesses, not-for-profit organizations, and individuals throughout the DC Metropolitan Area and across the nation and globe. The firm has eight (8) practice areas to fully serve our clients: (1) Corporate/Business Law; (2) Government Contracts; (3) State/Federal Litigation/Dispute Resolution; (4) Employment Law; (5) Immigration; (6) Intellectual Property; (7) Franchising; and (8) Not for Profits.

The Bid Protest Weekly is an online journal created and maintained by our Government Contracts Practice Group. This and similar articles analyzing recent bid protest decisions are posted each week on the Bid Protest Weekly website: www.bidprotestweekly.com. The Bid Protest Weekly website also offers a continuously expanding archive of decision digests dating back to 2008 that summarize and categorize GAO bid protest decisions.

2015 New Year’s Resolutions for Employers

Review and Plan: Most employers understand that HR problems can derail a business operation. Accordingly, business owners/managers should conduct a review of 2014 HR issues/problems and develop a plan for successful 2015 HR management.

Review/Update Employee Handbook and other Employment Documents: Employment laws are constantly changing. Your business is changing. If you have not reviewed and updated your Employee Handbook, job application, offer letters and other employment-related documents in the past few years, they are likely out of date (and potentially legally insufficient or illegal).

Conduct Harassment Training and Ensure all Employees have Acknowledged Receipt of Policy: The U. S. Supreme Court has provided employers an affirmative defense to harassment/discrimination charges (in certain circumstances) if an employer has a proper anti-harassment/non-discrimination policy in place, that has been effectively communicated to employees, and the complaining employee has not utilized such procedures. Accordingly, all employers need to: (a) ensure that they have well drafted harassment/non-discrimination policy; (b) make sure employees sign receipt that they have received such policy; (c) provide training to all employees and managers about such policy. This should be done annually and for all new employees.

Review/Update/Implement Confidentiality and Non-Competition Agreement: Your business trains employees, introduces them to your clients and vendors, provides them access to your technology and trade secrets, if your business does not have a Confidentiality/Non-Compete Agreement in place, it should. Further, if you have an existing Non-Compete Agreement in place, unless drafted by an attorney and reviewed/updated in past few years, it could be outdated and unenforceable. A good agreement should: (a) protect Confidential Information/Trade Secrets; (b) provide intellectual property rights for employer through “work for hire” provisions; (c) prohibit former employee from recruiting your employees/contractors; (d) prohibit former employee from soliciting clients/prospective clients; and (e) depending on your business, prohibit your former employee from competing with your business on limited (duration and geography) basis.

Review Employee/Contractor Classifications: First, make sure you have employees and independent contractors properly identified. If your business controls the when, where and how of the relationship, the person is likely an employee and, as such, must be paid on W-2 basis. If person has their own business, works for multiple companies, has his/her own equipment, carries business insurance, has website, he/she is likely independent contractor and can be paid on 1099 basis. If any confusion, ask your attorney. Second, the Fair Labor Standards Act (“FLSA”) defines exempt and non-exempt employee categories. Exempt employees do not need to be paid overtime for work over 40 years in a week. If you have not done so in past year (with a knowledgeable attorney or HR professional), review all employment positions and ensure that employees are properly classified. Finally, make sure your business understands the FLSA rules with regard to payment obligations.

Review/Update Performance Evaluation Process: Effective HR management generally leads to hard-working employees striving to help their employer grow and succeed. Without an effective performance evaluation process (“PEP”), employees are often confused, frustrated and unsatisfied. Further, and from a legal perspective most importantly, without an effective PEP, an employer may not have a documented paper trail to substantiate employment termination decisions when faced with a discrimination charge. Accordingly, at a minimum, all employees should undergo formal PEP on an annual basis (it is recommended that there also be semi-annual mini-PEP). Further, any time employees make mistakes or are reprimanded, there should be formal documentation of such actions. When an employer has effective communication with employees through PEP and documentation of any mistakes/reprimands, not only are employees more likely to succeed, but also, if such employee needs to be terminated, the employer has strong evidence supporting the employment termination decision.

Fire Problem Employee(s): You likely have heard the express “hire slow, fire fast.” It is true. Unfortunately, too often employers don’t want to fire problem employees for a myriad of reasons. And, too often such problem employees are not only putting a tremendous operational drain on the business, but also they are the employee who is likely to file a discrimination lawsuit when finally fired. So, resolve in 2015 to fire (as soon as possible) your problem employees. Make sure you have documentation and substantiation for termination decision. Fire them. It is amazing how often times after a problem employee is terminated there is general improvement in morale and productivity in a business.

Make Sure Your Business Has A Good Employment Law Attorney: Finally, when your business is getting ready to make an employment-related decision, whether hiring, granting leave, or a termination decision, you should not make the decision without legal counsel. You should have a good employment law attorney you can call to make sure that you are not missing any landmines.